Who'll pay compensation in road accident? Registered owner or user of a vehicle

The Supreme Court has agreed to adjudicate whether mere transfer of a vehicle without change of registered ownership would absolve the registered owner of the liability under the Motor Vehicles Act to pay compensation to a victim if the vehicle met with an accident.Amit Anand Choudhary | TNN | July 17, 2016, 12:01 IST

NEW DELHI: Can a registered owner of a car be made liable to pay compensation in case of a road accident even if he had sold his vehicle to another person but continued to be the owner on paper?

The Supreme Court has agreed to adjudicate whether mere transfer of a vehicle without change of registered ownership would absolve the registered owner of the liability under the Motor Vehicles Act to pay compensation to a victim if the vehicle met with an accident.

A bench of Justices SA Bobde and Ashok Bhushan stayed the order of the Punjab and Haryana high court which held the person who had purchased the car would be liable to pay compensation in case of an accident even if the vehicle is not registered in his name.

The HC had directed one Naveen Kumar to pay compensation of Rs 5.23 lakh to the family of a person who was killed after being hit by his car. Challenging the order of the HC, advocate Rishi Malhotra, appearing for Kumar, contended that the car was not registered in his name and he could not be asked to pay compensation.

Referring to the Motor Vehicles Act, Malhotra told the bench that law recognised registered the owner and not the 'real owner' of the vehicle and only the registered owner could be made liable to pay compensation.

He said the Motor Accident Claims Tribunal had rightly held that only registered owner be made liable to pay compensation and the HC erred in setting aside the tribunal's order by wrongly interpreting the Act. "The high court by its judgement created a third contingency which is not contemplated under the Act wherein mere transfer of a vehicle without change of registered ownership would absolve the registered owner from the liability under the Act," he said.

The bench after hearing his arguments agreed to look into it and issued notice to the registered owner of the offending vehicle seeking response why he should not pay the compensation awarded by the tribunal instead of Kumar who had purchased the car from him.

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